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Investment Overview for New York Times (NYSE:NYT)

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Below are key drivers of NYT's value that present opportunities for upside or downside to the current Trefis price estimate for NYT:

NYTimes Online Services

Number of NYT Online Subscribers: NYT announced the launch of the digital subscription service in March 2011. The company has 910,000 subscribers to this service in 2014. We also believe that this number will continue to increase till the end of our forecast period to around 1.41 million. In the scenario in which this service exceeds our expectations, and the number of paid subscribers increases to around 2 million by the end of Trefis forecast period, there could be an upside of 10% to ${trefisprice}. However, if this service fails to gain traction and the number of subscribers reaches only about 1 million by the end of Trefis forecast period, there could be a downside of 5% to ${trefisprice}.

Page views per unique NYTimes.com visitor: Page Views per Unique NYTimes.com Visitor have grown in 2014 due to launch of new online products and digital subscription service. If page view per visitor increases to around 20 per month throughout the Trefis forecast period, there could be an upside of 5% to ${trefisprice}. However, if the user activity declines more than our expectations for the page views per unique user to decline to around 7 per month by the end of Trefis forecast period, there could be a downside of about 5% to ${trefisprice}

For additional details, select a driver above or select a division from the interactive Trefis split for NYT at the top of the page.

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The New York Times Co. (NYT) is a media company primarily in the newspaper business. It owns the New York Times, and in the first half of 2014 was able to sell New England Media Group, thus completing the disinvestment process.
Current, the company makes money through advertising in its print newspapers, online advertising and newspaper circulation fees. In 2011, the company also launched a paid subscription service for NYTimes.com, which added an additional revenue stream of digital circulation.

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US Newspaper Advertising Spending

The total advertising spend on print advertisements in newspapers stood at around $15.9 billion in 2014, which includes national ads as well as retails and classifieds. Although this is a steep decline from the +$40 billion market size in 2007, print advertising still contributes a sizeable proportion of NYT's revenues. However, with online advertising increasingly expected to rise in the future, there is a lot of pressure on media houses like The New York Times to diversify their content offerings to online media as well.

News Media Group National Print Ad Market Share

The overall print ad market share for the News Media Group rose from 2% in 2009 to 3% in 2014 as the company consolidated its readership base and increased prices for its ad slots. While the relevance of print advertising is on a continuous decline, The New York Times carries with it a significant brand value which represents high quality of journalism and analysis. This would play a key role in increasing the company's market share in an otherwise declining national print ad market in the future.

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Digital content increasingly gaining relevance

Online media provides more abundantly available information, that too at a faster rate and cheaper prices when compared to print media. This has effectively rendered print newspapers obsolete, and as online reading is made further easy by tablets/smartphones, both physical circulation and print advertising within newspapers would see a decline going forward.

NYT moving towards paid digital service

NYT unveiled its digital subscription service designed to charge a fee to “heavy users” of its online platform. Under this payment structure, all users will be able to access 10 articles per month for free, and can also access NYT’s articles through search engines. Subscribers to NYT’s print version will also have full access to NYT online. This digital subscription, or "paywall", is intended to provide an easy transition of NYT's print newspaper readers to its online version, especially as circulation numbers continue to decline for newspapers worldwide.

Social and mobile to drive future growth

Social networking leaders Facebook have initiated a unique concept of "frictionless sharing" through their Open Graph tools, which enables publishers to instantly get their articles/content shared across a user's network of friends. Various media companies like Yahoo! and Washington Post have adopted the Open Graph to increase user engagement, and we expect more websites to join the bandwagon if they are to increase both web traffic and user engagement. Additionally, the growing penetration and bandwidth capabilities of smartphones and tablets would play a major role in increasing traffic and viewership for media companies. NYT has also made headway in this segment by releasing smartphone and tablet-specific apps.

How Does Trefis Modelling Work?

How do we get the historical numbers for this chart?

Trefis has a team of in-house Analysts who gather historical data from company filings and other verifiable sources. When historicals are available, we explain how we got them at the bottom of the Trefis analysis section below.

Who came up with the Trefis forecast for future years?

The Trefis team of in-house Analysts considers a variety of factors when projecting any forecast. The rationale for our projections is explained in the Trefis analysis section below.

How does my dragging the trendline on the chart impact the stock price?

We use forecasts for business drivers to calculate forecasted Revenues and Profits for each division of the company.

We then use forecasted Profits in a Discounted Cash Flow (DCF) model to obtain the Price Estimate for the company.

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